U.S. cotton spent year battling for respect

Rodney Dangerfield got more respect than the U.S. cotton industry has received over the past year from so-called friend and foe.

John Pucheu, National Cotton Council Chairman and Tranquillity, Calif., producer, detailed to the opening general session of the Beltwide Cotton Production Conferences in Nashville, Tenn., a volley of shots fired across the U.S. industry's bow that have forced the industry to fight back at home and abroad to stay afloat.

Pucheu proclaimed the industry is still afloat and plans to stay that way.

Battling its detractors with one hand, the National Cotton Council weighed in with compromises to ward off attempts at wholesale dismantling of the U.S. federal cotton program in the new farm bill.

Pucheu said heading into the initial farm bill debate, “It quickly became clear that cotton was targeted for change” when the program received “unwarranted and yet significant criticism.” The former friend — the U.S. Department of Agriculture — was one of those targeting cotton.

About the same time, U.S. cotton was adorned with a bulls-eye by Brazil within the World Trade Organization (WTO) and “unfounded claims” by Oxfam, a lobbying group attempting to change U.S. farm policy to benefit West African cotton farmers.

To ward off wholesale changes in the new farm bill, the industry convinced former Secretary of Agriculture Mike Johanns to establish a marketing loan working group that developed a comprehensive set of recommendations adjusting the marketing loan program, a majority of which were included in the House Agriculture Committee farm bill recommendation.

A Senate and House conference committee will soon take up the farm bills passed by both chambers of Congress.

The WTO Brazil case, bolstered by the testimony of Brazil-paid consultant Daniel Sumner, chairman of the University of California, Davis, Department of Agricultural and Resource Economics, claimed that Step 2, export credit guarantees, marketing loans and countercyclical payments were distorting world cotton prices.

The U.S. dropped Step 2 and modified other elements, but a WTO compliance panel said that was not enough. The United States has appealed the call for more draconian measures.

Crawford Falconer of New Zealand, chairman of the WTO agricultural negotiations, issued two papers, one saying the U.S. should cut cotton support even more and accept less market access than the U.S. initially offered.

Falconer also recently recommended that the U.S. reduce “amber box” spending on cotton by more than 90 percent compared to recent levels. He also said there should be higher reductions in overall trade distorting support and less market access than the United States had originally agreed to.

The NCC immediately challenged the administration to oppose the cotton-specific language. The NCC also has detailed to trade negotiators its priorities on market access, including significant increase in market access to China.

The attack from WTO is tightly wound into the current farm bill debate. To that end, a nonprofit, non-governmental group called The American Enterprise Institute for Public Policy Research sponsored a meeting recently in Washington — on the eve of the farm bill conference committee convening — with the premise being an attack on the cotton industry and overall ag trade policy.

Sumner was scheduled to be one of the speakers as well as a spokesman for Oxfam.

Literature promoting the event said, “(U.S.) Agricultural policy has become the central stumbling block in the Doha round of negotiations and inflexibility over U.S. farm subsidies could lead to the failure of trade negotiations altogether.”

Two scheduled moderators were Dan Morgan, a contract (freelance) writer for the Washington Post and a fellow at the German Marshall Fund nonpartisan public policy institution. Morgan has written several articles lately heavily quoting critics of the farm bills coming out of the House and Senate. A former California congressman, Calvin Dooley, now an executive with the Grocery Manufacturers/Food Products Association, was scheduled to be the other moderator. Although Dooley was a San Joaquin Valley dairyman and farmer when he was in Congress, he frequently criticized U.S. farm policy.

This undeniably biased gathering was scheduled about the time the conference committee took up the two bills.

Chuck Conner, acting secretary of agriculture, was scheduled to be the keynote speaker. The Bush administration's agricultural department has been openly critical of the bills passed by the House and Senate. President Bush has threatened to veto any bill that looks like either the House or Senate bill.

With more than 70 percent of U.S. cotton now exported, trade issues and the farm bill are critical to the survival of U.S. cotton.

In getting farm bills out of the House and Senate, the cotton industry had to accept — and even suggested — compromises. However, it successfully headed off more onerous amendments.

It has been a tough year politically for cotton, but Pucheu told Beltwide attendees the industry has “excellent prospects for achieving profitable cotton production and processing. There are many challenges before us. Research, education, and technology transfer continue to be critically important,” he said, reiterating the council's commitment for technology development and transfer and “bringing resolution to technology-based priorities.”

Around the conference time, cotton future prices began to rise and continued upward during January, chasing the higher corn and soybean prices. This went a long way to returning optimism to an industry that has suffered through an arduous year at home and abroad.